The assassination of Irish gangster David Byrne at the Regency Hotel Dublin on 5 February 2016 provides a textbook case study of hotel vs. insurance company wrangling over policies and payouts. The hotel suffered only slight physical damage from the attack, but business losses mounted, and the insurance company did not want to issue a payout. In the end, all parties lost out. The lesson here is that clear and decisive policies – especially regarding violence against hotels – can improve the insurer-client relationship, and justifiable payouts do not have to drown in a sea of litigation.

The Regency Hotel Dublin (aka, The Regency Hotel) is a three-star, independent, family-run hotel. Its parent company is Regan Development Ltd. The hotel has a reputation as a lively, warm, and bright gathering place for sporting events, weddings, and other celebrations. The Regency website says it has 240 bedrooms, and it earned about €7.3 million in 2015, reports the Daily Mail.

The attack on Mr. Byrne was dramatic. As the weigh-in ceremony was taking place for a World Boxing Organization European Lightweight title fight, two men wearing Garda Síochána (Irish police) tactical SWAT gear burst into the Regency with AK-47s, firing a few rounds and scattering the crowd. (Irish police, however, do not carry AK-47s and instead use more modern Heckler and Koch and AR-15/M-4 weaponry as their long guns and submachine guns.) Two male spotters armed with pistols that had infiltrated the crowd ahead of time – one of them dressed as a woman so the duo would appear as a male-female couple – attempted to identify the assassination target for the AK-47 gunmen, a top rival gangster of the Kinahan crime group. When the gunmen could not find their main target, they shot and killed Mr. Byrne, who was a top lieutenant of the Kinahan organization.

The shooters were allegedly from the Hutch crime group, and an IRA weapons supplier connection was also alleged.

The Continuity IRA actually claimed responsibility for the attack, but authorities have dismissed IRA ideology as being the key motivator in the case. A deadly feud between the Hutch and the Kinahan groups had been ongoing for some time, and the attack at the Regency was part of that feud, say officials.

Adhering to the general adage for insurance claims, “file fast and with facts,” James McGettigan, director of Regan Development Ltd, contacted his insurance company, Aviva plc, within about an hour of the 5 February attack to file a claim, according to the Daily Mail. Aviva is reportedly the UK’s largest general insurer, and it is a global insurer as well.

It is likely, based on the situation at hand, that the claim included damage repairs from the gunfire and some kind of business loss as a result of the boxing event being shut down.

After filing, however, Mr. McGettigan heard nothing back from Aviva, so say a multitude of press reports.

The Daily Mail says that by 18 February, the well-publicized, sensational attack had metastasized throughout the Irish and international press, and business at the hotel had plummeted. The Regency, at that point, estimated its business losses had reached more than €172,000 – with incidental costs bringing the initial claim estimate to just over €217,000.

By March, with still no word from Aviva, the Regency assembled a legal team to resolve the issue. The team included:

Georgina Robinson, Principal Solicitor at Robinson O’Neill Solicitors, skilled in litigation and civil litigation, and her firm had been involved in criminal defense cases as well

Gareth Robinson Bl, administrative law, commercial/chancery, general practice, general common law, and specializing in arbitration/dispute resolution, environmental law, planning and local government law

The team’s purpose, reports the Daily Mail, was two-fold. First, it wanted the Irish High Court to force Aviva to make a payout per its policy with the Regency, specifically regarding business interruption as a direct result of the attack. Second, failing to secure the business interruption payout, the legal team wanted the court to award the hotel damages for Aviva’s alleged breach of contract.

The team argued five key points to the Irish High Court to make its case:

The hotel’s policy with Aviva was covered by “the occurrence of murders.”

The hotel had suffered “immense reputational damage and loss of business.”

The hotel had suffered “devastating financial losses” and that business had been “severely and structurally undermined” as a result of the attack and sensational press coverage. (Scores of events had been canceled, including musical, wedding and other like gatherings, plus sporting events such as rugby and GAA weekends, and also St Patrick’s Day.

The hotel was “back in recessionary conditions by reason of cancellations and abandonment.”

Eventually, Aviva issued a payout of at least €100,000, says The Irish Daily Mail. It is not clear if the High Court forced the payout, or if litigation pressure triggered a settlement. At any rate, the Regency figured that this amount was too low, as it only covered the first 10 days of business losses after the attack, 5-15 February 2016. The hotel was interested in recovering business losses after this date, so it continued with litigation.

In April 2016, the Regency had added yet another lawyer to its team, Richard Kean SC (also spelled “Keane” in various press reports.) Kean asked the court to temporarily halt the case so arbitration could take place. The court agreed, and an unnamed but “well-known Law Library heavyweight” served as a mediator between the Regency and Aviva regarding the remaining insurance claims for business losses past 15 February. The financial number here is not known, but The Irish Sun speculated that it was “millions of euro.” This supposition remains unconfirmed, and it could be that the hotel was still only seeking a several hundred thousand € payout. Since the hotel made €7.3 million in 2015, which is roughly €608,333 a month (hotel events would make this figure fluctuate in real terms,) it stands to reason that a several hundred thousand € payout was still sought.

In July 2017, The Irish Times reported that the case had ended on 6 October 2016 with the hotel receiving “a net insurance payout of €150,000” that appears to have been specifically for the shooting and the hotel’s business losses. The same paper said that “an additional €350,000 was paid out in legal fees.”

On 14 July 2017, McGettigan told The Irish Sun that the hotel had recuperated to near 2015 levels, and that ongoing refurbishment would hopefully restore the hotel’s business to pre-attack levels. He told the Sun: “The first half of 2016 was difficult for the hotel, however the second half saw a significant recovery in our business.”

There are two main takeaways here. First, it is evident that a more clear and concise policy, whether it was property casualty, or business interruption, or something similar (press reports did not specify the exact policy issue at stake,) would have prevented this case from going to court, or it might have at least reduced time in court. Actuarial data on hotel attacks by terrorists, violent criminal gangs, and like groups would go a long way to alleviate this kind of problem.

Second, less than decisive policies can generate court costs for both the insurer and the insured to the point that both parties lose. Specifically, if financial numbers reported in the press are accurate, then the Regency-Aviva case appears to reflect this phenomenon (Muir Analytics will adjust this article if alternative data becomes available.) Reportedly, the Regency wanted at least a €217,000 payout. Ultimately, it received €150,000 in compensation and €350,000 for legal fees (a total sum of €500,000.) So the hotel came up €67,000 short to cover repairs and business losses (unless some of the legal fees were used to cover business interruption, but lawyers are expensive, and this is an unlikely scenario.) This is no small amount for an independent hotel.

Regarding Aviva’s loss here, it could have paid the initial claim of €217,000, but instead, it ended up paying €283,000 more in October, which is a negative for any insurance company, large or small. Again, a clear and decisive policy, based on actuarial data, likely would have prevented this.